Bipartisan bill would make employer tax credit for paid leave permanent

The employer tax credit for paid family and medical leave would be made permanent under legislation introduced this week by US Sens. Deb Fischer (R-NE) and Angus King (I-ME).

The senators led the effort to establish the country’s first-ever nationwide PFML policy, which was included in the 2017 Tax Cuts and Jobs Act and implemented in 2018. Without further action, the credit is set to expire in 2025. By making the employer tax credit permanent, the legislation aims to make it easier for businesses of any size to offer PFML plans to their employees.

The bill also would provide additional options for financing paid leave, such as through PFML insurance. And the legislation includes a provision that would allow eligible employers to receive the credit for leave offered that exceeds any state or local mandates, according to a press release from King’s office.

“Americans shouldn’t have to choose between making ends meet and taking care of family — that’s why Sen. King and I passed the first ever nationwide paid family leave law. Now, we need to make that legislation permanent and expand access to paid family leave,” Fischer said Monday in a statement. “Our new bill will encourage more businesses to offer paid family leave to more working Americans.”

Under the current law, according to Fischer’s office, an employer must meet the following criteria to claim the credit: provide at least two weeks of paid medical leave for qualifying workers, have a written policy in effect, and pay at least 50% of an employee’s normal wages while he or she is taking a medical leave.

According to the Bureau of Labor Statistics, only 20% of workers at employers with fewer than 99 employees have access to PFML, Fischer noted.

The legislation is supported by the AARP, the American Council of Life Insurers, the American Institute of Certified Public Accountants, the Bipartisan Policy Center, the National Federation of Independent Businesses, the National Restaurant Association and the One Country Project.

“The proposal by Sens. Fischer and King will be a great help to millions of working parents,” American Council of Life Insurers President and CEO Susan Neely said. “The tax credit offers a means for large and small employers to provide their workers with an insurance benefit to cover their paid family and medical leave when needed. It also makes it easier for employers to qualify for the credit which will help expand access to more people.”